City tightens belt, OKs 2004 budget

By state law, the city administration must balance its budget and have it approved in its final form by council no later than March 31 each year.

The passage of the budget was the culmination of a challenging process, said Councilman at Large and Finance Committee Chair David Bennett, who described it as absolutely the most difficult in my 14 years on council.

The total 2004 budget is $17,978,050.34. Of this, $5,324,988.76 is the general fund budget. The remaining $12,653,061.58 are special budgets. Last years budget was about $18.7 million.

Bennett said several cuts from the 2003 budget, due to several reasons, were made to reach a balanced budget.

Weve had a 35 percent decline in revenues from the State of Ohio, he said. Our interest dollars are down approximately $200,000, because the interest rates on our deposits are so low. Municipal court revenues are off substantially. But number one is insurance costs.

Bennett said money budgeted for insurance the past few years of about $400,000 annually has been tripled in actual expenditures to $1.2 million each year.

In essence, over the last three years weve used up a large amount of our reserves taking care of the employees and paying for the medical costs for the employees, he explained. Were hoping that this year, with the advent of the new insurance coverage that weve put in place, that thats going to cut our insurance costs substantially. But it doesnt do us any good in terms of whats happened in the past and the money that the city has had to spend in the past to take care of the employees.

Income tax revenues, though up from previous years by several hundred thousand dollars, are in essence at about the same level as in years past. This is because the increase is money raised through a 3/10ths of a percent increase in the city income tax previously approved by voters and that can be used only for the Continuous Street Improvement Plan. That money, Bennett said, cannot be used for any other purpose than the CSIP.

Spending has not increased substantially the past few years, he added, citing that the total city budget has increased about 4 percent annually the past half decade, much of the increases being due to increased insurance costs.

In 1990 the city employed 146 workers, he said. Now, 14 years later, the city employs 157, an increase of 11.

The general fund budget is comprised of several budgets, including the municipal court, civil service, public lands and buildings, park budget, hospitalization, police, economic and community development and the offices of the mayor, auditor, treasurer, law director, engineer and the service and safety director. These general fund budgets are funded through income tax revenue, money given to the city from the state government, real estate taxes, personal property taxes and some revenues from the municipal court, among other miscellaneous sources.

The special budgets include the budgets of the street, cemetery, water and sewer and fire departments. They are funded through sources other than those of the general fund, including fees collected for services.

The two funds are like apples and oranges, Bennett said. Money from one cannot be used by the other.

He cited, as an example, the recently completed mausoleum at Northwood Cemetery. The construction cost of several thousand dollars was taken from the cemetery fund, which, by law, can only be used within the cemetery department. Such funds cannot be used elsewhere within the city budget.

This is also true for funds within the Street Department, for example. The purchase of an expensive piece of equipment by the department while other departments within the city struggle for funds may confuse some residents unless they realize that the money cannot be transferred from the Street Department to these other departments.

Bennett was quick to praise Municipal Court Judge John Mark Nicholson for his generosity in transferring some funding from the court to bolster the general fund.

He added that, while the current financial state of the city may seem dire, communities throughout the state are, in some cases, in far worse fiscal shape.